On April 11, 2020, the U.S. Department of Labor (DOL), Health and Human Services (HHS) and the Treasury (collectively, the "Departments") jointly issued further Q&A guidance (the "Guidance") on implementation of the changes for healthcare plans under the two major COVID-19 emergency laws passed in late March – the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The DOL has been continually releasing guidance on these laws, but this latest Guidance directly addresses the impact on group health plans.
The Requirement to Cover Coronavirus Testing and Related Services Without Deductibles, Co-Insurance, Copayments, or Prior Authorization Requirements
Types of Plans
The FFCRA and CARES Act require that group health plans (including grandfathered plans under the Affordable Care Act) cover COVID-19 testing and items and services provided during an office, urgent care, or emergency room visit that results in COVID-19 testing without imposing any deductibles, copayments, co-insurance or
prior-authorization requirements. The Guidance clarifies that the following types of healthcare plans are subject to these rules:
- Fully insured and self-insured group health plans;
- Private employment-based health plans;
- Nonfederal governmental plans;
- Church plans;
- Coverage offered in the individual market through or outside of an Exchange; and
- Student health insurance.
There are, however, some plans that are not required to follow these rules, and those include:
- Short-term, limited-duration insurance (most commonly known as “gap” coverage);
- Plans providing for excepted benefits (i.e., limited-scope dental or vision, account-based plans, etc.); and
- Retiree-only plans.
The Guidance clarifies that the requirement to cover services without imposing deductibles, copayments, co-insurance, or prior authorization requirements applies to services furnished on or after March 18, 2020 (the date the FFCRA was signed into law).
Items and Services Included
The Guidance clarifies that testing covered by these provisions includes any testing that a state has authorized or for which the test developer has
requested, or intends to request, emergency-use authorization from the FDA. Furthermore, plans must cover "items and services" furnished in connection with a visit that results in testing but only to the extent they relate to the furnishing or administration of the test or the evaluation of the individual for purposes of determining the need for testing.
The Guidance expands on this by providing that if the healthcare provider is testing for other causes of respiratory illness and determines other tests should be performed (i.e., flu tests, blood tests, etc.) in order to see if a COVID-19 test is necessary, the other tests also are subject to this rule. The Guidance further provides that
serological testing (testing used to detect antibodies to determine current or past infection), is included and also must be covered without copayment, co-insurance, deductible, or prior authorization requirements. The Guidance also clarifies that testing administered in more nontraditional settings, such as drive-through testing or testing sites, are included under this rule.
Notice Requirements and Mid-Year Plan Design Changes
General rules on Summaries of Benefits and Coverage (SBCs) require that any material change to plan coverages must be reflected in updated SBCs at least 60 days prior to the change. The Guidance relaxes this requirement in the case of COVID-19 testing and treatment, stating that there is no prohibition against a mid-year addition to coverage without prior notice. Instead the Guidance provides that notices should be
provided to participants as soon as reasonably practicable either via an updated SBC or a Summary of Material Modifications.
Generally, plans and health insurance issuers are not permitted to modify health insurance products mid-year. However, the Guidance provides that they are permitted to make changes mid-year to increase coverage for the diagnosis and/or treatment of COVID-19 [provided the changes are made during the COVID-19 or national emergency declaration period under the National Emergencies Act (the "Emergency Period")], increase coverage for
telehealth/other remote care services, and reduce or eliminate cost sharing for telehealth or other remote care services.
State COVID-19 Related Actions
The Departments note that nothing in the FFCRA or CARES Act prevents states from imposing additional standards or requirements on health insurance issuers with respect to COVID-19 diagnoses or treatments, to the extent the rules would not be preempted by federal law. The Departments also encourage states to support efforts to increase telehealth services, including consideration of relaxed licensing laws during the Emergency
Period. Note that the State of Ohio’s Department of Insurance issued a bulletin imposing several COVID-19 related restrictions and obligations on health insurers in Ohio (a summary of the bulletin can be found here).
The Departments will not take action against any plans or health insurance issuers for failures to provide notice regarding changes made during the Emergency Period to increase coverage for COVID-19 related services, increase coverage for telehealth or other remote care services, or to decrease cost sharing for telehealth or remote care services. HHS encourages the states to take similar non-enforcement positions. If plan sponsors choose to maintain these changes beyond the Emergency Period, they must comply with all
other applicable requirements to update plan documents or terms of coverage. To the extent plans or health insurance issuers choose to limit or eliminate other benefits or increase cost-sharing in efforts to offset the costs of the increased COVID-19 benefits, the Departments’ non-enforcement policy does not apply.
The Departments clarify that the CARES Act specifically adds a temporary safe harbor to permit plans to cover telehealth/other remote care services before participants satisfy deductibles under a high-deductible healthcare plan without causing the
participants to lose eligibility to contribute to a Health Savings Account (HSA). Further, the Departments encourage plans to notify plan participants of telehealth/other remote care service availability and ensure participants have access to a robust suite of telehealth/other remote care services, including for treatment of mental health and substance use disorders. The Departments also encourage, but do not require, these services to be provided without cost sharing or other medical management requirements (i.e., prior authorization). This exception to high-deductible health plan/HSA rules for telehealth and other remote care services became effective March 27, 2020 and will apply to plans years beginning on or before December 31, 2021.
As noted above, the requirement to cover COVID-19 testing and services related to testing does not apply to excepted benefit plans. The Guidance further details how the FFCRA and CARES Act provisions are applied to specific excepted benefits including Employee Assistance Programs (EAPs). EAPs are considered to be excepted benefits so long as they do not provide significant benefits in the nature of medical care (among other rules). The Guidance clarifies that if an employer chooses to offer benefits for diagnosis and testing for COVID-19 under its EAP during the Emergency Period, the benefits
will not be considered significant health benefits under the EAP rules and will not cause the EAP to lose its status as an excepted benefit.
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